Yingli Green Energy Holding (NYSE:YGE) earnings per share estimate was upwardly revised by Auriga on expected higher sales over the next two quarters, and on remaining committed to being a low-cost leader.
"We raise Yingli's 3Q10 and 4Q10 estimates on higher sales, better than expected cost control, and currency tailwinds. Yingli's price-leader sales strategy stoked its channel while cost programs have run ahead of industry price declines. Yingli's near-term results clearly benefit from current industry trends, and we expect this to continue into 2011. We maintain our 2011 estimates ahead of the 3Q10 report and look for more clarity from the call before adjusting our 2011 view in-line with recent trends...We raise near-term estimates to reflect industry trends and increase 2010 Sales/GM%/EPS to $1.78b/32%/$1.30 from $1.67b/30.6%/$1.00, but maintain our prior 2011 estimates and $15 target," said Auriga.
They maintain their "Buy" rating on Yingli, which closed Wednesday down at $11.90, losing $0.06, or 0.50 percent. A price target of $15 was placed on Yingli by Auriga.
Showing posts with label Auriga. Show all posts
Showing posts with label Auriga. Show all posts
Thursday, November 4, 2010
Tuesday, November 2, 2010
Jinko Solar (NYSE:JKS) Should Push its Way to Higher Earnings
JinkoSolar Holding (NYSE:JKS) looks like after its third-quarter report they have a strong chance of pressing their way into higher earnings, according to analysis from Auriga.
Auriga said, "Jinko Solar's (JKS, Buy) 3Q10 results above Consensus and our recently raised estimates show the continuing potential upside from big capacity additions and better than expected cost reductions. While we do see declining margins into 2011 as a necessity, we also believe Jinko Solar's approach is correct by increasing capacity ahead of price declines and continuing down the cost curve. We raise our 2011 EPS estimate to $5.05 from $4.60 and increase our target."
"Risk increases on potential ASP and poly swings. Large potential variability in module ASPs vs poly costs represents the biggest risk to the stock - both upside and downside. Management spoke of module ASPs trending with poly cost, but this is not assured. While we model both poly price and module ASP declines, we also recognize that the two are not inextricably linked. Our model assumes JKS' poly cost peaks at $72/kg in 1Q11 and declines to $55/kg in 4Q11."
JinkoSolar soared in Monday's trading after smokin' the quarter, with revenue soaring by 261 percent to $215 million, smashing the $153.3 million analysts were looking for. Gross profit outperformed as well, increasing from $9.3 million to $72 million.
Two things the company has going for it in a slowing market is the continual commitment to lower costs, while also being able to land deal for 2011 when most the rest of the industry will struggle.
JinkoSolar closed Monday at $35.14, gaining $4.99, or 16.55 percent. Auriga raised their price target on JinkoSolar from $37 to $40 a share.
Auriga said, "Jinko Solar's (JKS, Buy) 3Q10 results above Consensus and our recently raised estimates show the continuing potential upside from big capacity additions and better than expected cost reductions. While we do see declining margins into 2011 as a necessity, we also believe Jinko Solar's approach is correct by increasing capacity ahead of price declines and continuing down the cost curve. We raise our 2011 EPS estimate to $5.05 from $4.60 and increase our target."
"Risk increases on potential ASP and poly swings. Large potential variability in module ASPs vs poly costs represents the biggest risk to the stock - both upside and downside. Management spoke of module ASPs trending with poly cost, but this is not assured. While we model both poly price and module ASP declines, we also recognize that the two are not inextricably linked. Our model assumes JKS' poly cost peaks at $72/kg in 1Q11 and declines to $55/kg in 4Q11."
JinkoSolar soared in Monday's trading after smokin' the quarter, with revenue soaring by 261 percent to $215 million, smashing the $153.3 million analysts were looking for. Gross profit outperformed as well, increasing from $9.3 million to $72 million.
Two things the company has going for it in a slowing market is the continual commitment to lower costs, while also being able to land deal for 2011 when most the rest of the industry will struggle.
JinkoSolar closed Monday at $35.14, gaining $4.99, or 16.55 percent. Auriga raised their price target on JinkoSolar from $37 to $40 a share.
Monday, November 1, 2010
Citigroup (NYSE:C), Deutsche (NYSE:DB), Auriga, Macquarie Give First Solar
First Solar (Nasdaq:FSLR) has garnered a lot of attention since their most recent quarterly report, drawing mixed rating results from Citigroup (NYSE:C), Deutsche Bank (NYSE:DB), Auriga and Macquarie.
The good news from their recent report was earnings per share exceeded analysts' expectations, with normalized EPS coming in at $2.21, although excluding one-time items, the company earned $1.87 a share, missing the analyst estimate of $1.94 per share, which is what most were looking at.
The bad news is cost rose during the quarter, generating questions as to if the industry cost leader is experiencing sustainable cost challenges, or they can rein it back in.
First Solar had their average cost per watt increase to 77 cents, a boost of 1 cent. That was based upon focusing on improving production lines, which ended up slowing things down.
Chief Executive Officer Rob Gillette said in the conference call of the company that they're working on reducing costs as production capacity is poised to double in 2012.
Again, cost performance going forward, and thus margins and earnings, will be determined on whether this was specific to the quarter, or a long-term
reality. No one knows at this time which it is. It generated concerns because it's the first time since the second quarter of 2008 the cost-per-watt increased sequentially.
Auriga said, "Core cost per watt increased slightly due to manufacturing
changes made in the quarter. While this is likely a one-time event, it does mark the first time since 2Q08 that cost-per-watt increased sequentially. With increased q/q utilization and module efficiency, concern might arise that cost reduction efforts are at least stalling."
Auriga maintained their "Buy" rating and $175 price target on First Solar.
Citigroup increased their price target on First Solar from $145 to $150,
although they are much lower than the other price targets mentioned here.
Macquarie downgraded First Solar from "Buy" to "Neutral," and Deutsche Bank downgraded them from "Buy" to "Hold." Macquarie has a price target of $175 on the solar company, raising it from $170.
The good news from their recent report was earnings per share exceeded analysts' expectations, with normalized EPS coming in at $2.21, although excluding one-time items, the company earned $1.87 a share, missing the analyst estimate of $1.94 per share, which is what most were looking at.
The bad news is cost rose during the quarter, generating questions as to if the industry cost leader is experiencing sustainable cost challenges, or they can rein it back in.
First Solar had their average cost per watt increase to 77 cents, a boost of 1 cent. That was based upon focusing on improving production lines, which ended up slowing things down.
Chief Executive Officer Rob Gillette said in the conference call of the company that they're working on reducing costs as production capacity is poised to double in 2012.
Again, cost performance going forward, and thus margins and earnings, will be determined on whether this was specific to the quarter, or a long-term
reality. No one knows at this time which it is. It generated concerns because it's the first time since the second quarter of 2008 the cost-per-watt increased sequentially.
Auriga said, "Core cost per watt increased slightly due to manufacturing
changes made in the quarter. While this is likely a one-time event, it does mark the first time since 2Q08 that cost-per-watt increased sequentially. With increased q/q utilization and module efficiency, concern might arise that cost reduction efforts are at least stalling."
Auriga maintained their "Buy" rating and $175 price target on First Solar.
Citigroup increased their price target on First Solar from $145 to $150,
although they are much lower than the other price targets mentioned here.
Macquarie downgraded First Solar from "Buy" to "Neutral," and Deutsche Bank downgraded them from "Buy" to "Hold." Macquarie has a price target of $175 on the solar company, raising it from $170.
Wednesday, October 27, 2010
JA Solar Holdings (Nasdaq:JASO) May Deliver 440 MW in Fourth Quarter
With JA Solar Holdings (Nasdaq:JASO) reporting delivery of 410 MW for the third quarter, Auriga says they their assumption of 44 MW shipment in the fourth quarter remains in play.
"JA Solar announced Q3 shipments of 410 MW prior to the market opening on Tuesday morning. Our previous model reflected prior guidance of 375 MW, thus we are increasing our estimate for the current quarter. Our model already assumed 440 MW of shipments in Q4; therefore, we see no reason to change our out-quarter estimates. In 2011, our model assumes over 1.8GW of shipments, which substantially exceeds the current run-rate established in Q3; there are no changes to our 2011 model," said Auriga.
"We continue to believe that gross margin will be the likely surprise in the quarter, as the consensus estimates are looking for just 21.2%. Cell pricing has been particularly strong in Q3, and we are modeling a 3% sequential increase to $1.34/W. That said, wafer prices have also been increasing, which will increase input costs and, in turn, will serve as an offset in COGS. We believe gross margin could reach 23% in Q3, and our new $0.38 EPS estimate remains above the consensus. Investors should expect to see a meaningful increase in gross margin dollars, although the gross margin percentage could show a small sequential decline."
Auriga is a little too optimistic concerning the overall solar industry in our opinion, as almost everything depend on the subsidized German market, which is scaling back subsidies, although will artificially grow in the short term.
JA Solar closed Monday at $8.64, gaining $0.19, or 2.25 percent. Auriga as a price target of $8 on them.
"JA Solar announced Q3 shipments of 410 MW prior to the market opening on Tuesday morning. Our previous model reflected prior guidance of 375 MW, thus we are increasing our estimate for the current quarter. Our model already assumed 440 MW of shipments in Q4; therefore, we see no reason to change our out-quarter estimates. In 2011, our model assumes over 1.8GW of shipments, which substantially exceeds the current run-rate established in Q3; there are no changes to our 2011 model," said Auriga.
"We continue to believe that gross margin will be the likely surprise in the quarter, as the consensus estimates are looking for just 21.2%. Cell pricing has been particularly strong in Q3, and we are modeling a 3% sequential increase to $1.34/W. That said, wafer prices have also been increasing, which will increase input costs and, in turn, will serve as an offset in COGS. We believe gross margin could reach 23% in Q3, and our new $0.38 EPS estimate remains above the consensus. Investors should expect to see a meaningful increase in gross margin dollars, although the gross margin percentage could show a small sequential decline."
Auriga is a little too optimistic concerning the overall solar industry in our opinion, as almost everything depend on the subsidized German market, which is scaling back subsidies, although will artificially grow in the short term.
JA Solar closed Monday at $8.64, gaining $0.19, or 2.25 percent. Auriga as a price target of $8 on them.
First Solar (Nasdaq:FSLR) An Investment, Not a Trading Stock
Communicating why it maintains a "Buy" rating on First Solar, Inc. (Nasdaq:FSLR), Auriga likes the strategy for the long term the management is enacting.
"Within our solar coverage, we continue to regard First Solar as an investment rather than a trading stock. Management has demonstrated the wherewithal to invest throughout the annual PV cycle while the project business brings stability to the business model in terms of both module placement and profitability. As the growth of the project business accelerates, the timing of revenue recognition will be difficult to model, thus investors, not traders, need to value the stock over longer investment horizons. Our profitability estimates continue to be above the Street consensus through 2011, and our initial EPS estimate on 2012 approaches $11/share," said Auriga.
Although possibly being too optimistic, Auriga sees earnings per share for 2010 having an upside, 2011 being too bearish for earnings per share, and expansion capacity driving the earnings per share to $11 in 2012.
Sounds more like a cheerleader in some ways rather than analysis.
First Solar closed at $148.15 Monday, gaining $1.00, or 0.68 percent. Auriga has a price target of $175 on them.
"Within our solar coverage, we continue to regard First Solar as an investment rather than a trading stock. Management has demonstrated the wherewithal to invest throughout the annual PV cycle while the project business brings stability to the business model in terms of both module placement and profitability. As the growth of the project business accelerates, the timing of revenue recognition will be difficult to model, thus investors, not traders, need to value the stock over longer investment horizons. Our profitability estimates continue to be above the Street consensus through 2011, and our initial EPS estimate on 2012 approaches $11/share," said Auriga.
Although possibly being too optimistic, Auriga sees earnings per share for 2010 having an upside, 2011 being too bearish for earnings per share, and expansion capacity driving the earnings per share to $11 in 2012.
Sounds more like a cheerleader in some ways rather than analysis.
First Solar closed at $148.15 Monday, gaining $1.00, or 0.68 percent. Auriga has a price target of $175 on them.
Monday, October 11, 2010
Solarfun Power's (Nasdaq:SOLF) Higher Inputs will Pressure Margins Says Auriga
Solarfun Power (Nasdaq:SOLF) was downgraded from "Buy" to "Hold" by Auriga, citing higher cost of inputs (glass, back sheet, poly, wafer, cell), which could lead to challenging margins and lower earnings for the company.
"Specifically, our model calls for - 19% gross margins in both Q3 and Q4, while the consensus estimates incorporate gross margins of 22% over the same timeframe - a 300 basis point discrepancy. While we expect positive comments with regard to both shipments and pricing, we believe the SOLF may be susceptible to higher input prices, thus affecting COGS, and ultimately EPS. We have tweaked our model slightly higher in the near term, but have kept our 2011 assumptions unchanged. Further clarity on ramping additional capacity next year could help raise our 2011 estimates and would allow us to be more constructive on the stock in the future. But in the short term, we find it prudent to step aside until the consensus expectations are re-evaluated," said Auriga analyst Mark Bachman.
Solarfun closed down Friday at $11.63, losing $0.79, or 6.36 percent. Auriga has a $13 price target on the company.
"Specifically, our model calls for - 19% gross margins in both Q3 and Q4, while the consensus estimates incorporate gross margins of 22% over the same timeframe - a 300 basis point discrepancy. While we expect positive comments with regard to both shipments and pricing, we believe the SOLF may be susceptible to higher input prices, thus affecting COGS, and ultimately EPS. We have tweaked our model slightly higher in the near term, but have kept our 2011 assumptions unchanged. Further clarity on ramping additional capacity next year could help raise our 2011 estimates and would allow us to be more constructive on the stock in the future. But in the short term, we find it prudent to step aside until the consensus expectations are re-evaluated," said Auriga analyst Mark Bachman.
Solarfun closed down Friday at $11.63, losing $0.79, or 6.36 percent. Auriga has a $13 price target on the company.
Monday, October 4, 2010
JA Solar (Nasdaq:JASO) Downgraded by Auriga
Citing valuation, Auriga downgraded JA Solar (Nasdaq:JASO) from "Buy" to "Hold."
There has been a mixed response from a number of analysts over the solar industry, as there is a growing demand for the product, but the margins have been under pressure, and valuations coming in at pretty high levels.
"With shares of JASO trading meaningfully above our price target, we find it judicious to downgrade our rating to Hold. Long-term investors may still find further upside to the shares as we assign a below-average P/E of just 8x, given JASO's lack of vertical integration within the solar supply chain, while short-term investors should find the current price level attractive to recognize profits. We recognize that industry fundamentals remain strong, and that JASO will likely print Q3 results ahead of consensus estimates, however; our price target uses our 2011 EPS estimate, which we are unable to meaningfully raise at this time," said Auriga.
Earnings season will help establish whether or not this is really a sustainable bull run in the solar sector. If margins are able to hold as revenue climbs, it'll be a good sign for the industry and investors.
Some believe the valuations of many of the solar companies are high, and there isn't a lot of room to move up, as in the case of JA Solar.
JA closed Friday at $8.68, dropping $0.65, or 6.97 percent. Auriga has a price target of $8 on the firm.
There has been a mixed response from a number of analysts over the solar industry, as there is a growing demand for the product, but the margins have been under pressure, and valuations coming in at pretty high levels.
"With shares of JASO trading meaningfully above our price target, we find it judicious to downgrade our rating to Hold. Long-term investors may still find further upside to the shares as we assign a below-average P/E of just 8x, given JASO's lack of vertical integration within the solar supply chain, while short-term investors should find the current price level attractive to recognize profits. We recognize that industry fundamentals remain strong, and that JASO will likely print Q3 results ahead of consensus estimates, however; our price target uses our 2011 EPS estimate, which we are unable to meaningfully raise at this time," said Auriga.
Earnings season will help establish whether or not this is really a sustainable bull run in the solar sector. If margins are able to hold as revenue climbs, it'll be a good sign for the industry and investors.
Some believe the valuations of many of the solar companies are high, and there isn't a lot of room to move up, as in the case of JA Solar.
JA closed Friday at $8.68, dropping $0.65, or 6.97 percent. Auriga has a price target of $8 on the firm.
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